Deploying an Orchard website to IIS

I was wondering what the exact steps (recommend rather) are for hosting my Orchard website in IIS. I used the built in Publish feature of VS2012 to build a deployment package of the Orchard.Web project, and that gave me a .Zip file (about 22MB) along with
a cmd file and a couple of XML and text files. I'm not sure what to do with these files now. Do I place the .zip file in the physical path of my website in IIS? I've tried that but I get various config and permissions errors, or I just get a directory listing
when I browse to the site.

My questions are:

What do I do with the deployment package VS gives me? A detailed explanation would be greatly appreciated.

Is it OK to copy the Orchard.web project to the physical path of my website? This actually works and my site is up and running in IIS, but for some reason it doesn't feel right? Is there anything wrong with this approach?

What I ended up doing was setting compilation debug="false" in the site's Web.config and then building a deployment package called OrchardDeploy.zip of the Orchard.Web project from Visual Studio 2012 which gave me a 17 MB zip file, I then extracted
that folder and went all the way down to this sub folder (obviously the names of your folders will differ base don what you called your site and what source code version you used):

and copied the contents of this folder to the root of my site in IIS, now the package is around 40MB, compared to the whole 1GB Orchard.web project which I was previously copying to my IIS site's root.